Why not show the button, even if there is no label in the local wikis language? A popup appears, asking for a title. The default can be empty. The only reason I can think of to not have this button is to enforce people to edit Wikidata first. Personally I don't think this is good.

Yeah, we should probably do this.

The button also disappears if the article is protected. But this check is done using the current label, not the title the user is going to enter in the dialog. This appears to be wrong. However, I can think of a reason why this behavior is good: If a local community decided to block an item for creation, based on the label the item haves, no article should be created, not even with a different title.

Does our dialog tell that the page is protected and another name needs to be found? If not, we should change that. Either way, I think the button should also appear in these cases.
If a community wants to "blacklist" a placeholder (in one way or another), we will have to find other mechanisms for that, I guess… labels are fragile and often ambiguous.